SP gets new management, ex-CEO vows to retain post

SP gets new management, ex-CEO vows to retain post

M. Taufiqurrahman, The Jakarta Post, Jakarta

The country's largest cement producer, publicly listed PT Semen
Gresik, decided on Monday to oust the rebellious top executives
of its West Sumatra-based subsidiary PT Semen Padang, who have
been fighting against the government's plan to sell its
controlling stake in the parent company to Mexican cement giant
Cemex.

The old management team, which seems to have the support of
Semen Padang employees and the local court, however, vowed to
retain their positions, claiming that the management reshuffle
was unlawful.

"We deny the legality of the extraordinary shareholders
meeting, therefore the outcome is also illegal," outgoing Semen
Padang president Ikhdan Nizar told The Jakarta Post.

The long-overdue shareholders meeting was arranged by Semen
Gresik with the management reshuffle as the main agenda.

Ikhdan said that all moves made by Semen Gresik was
illegitimate following a local court's ruling to abrogate all
legal rights held by Semen Gresik in Semen Padang, which
contributes a third of Semen Gresik's total output.

On May 9, the Padang District Court in West Sumatra handed
down a ruling that annulled the sale of Semen Padang to Semen
Gresik in 1995.

However, the Supreme Court recently approved Semen Gresik's
proposal to hold an extraordinary shareholders meeting regarding
Semen Padang.

The former management of Semen Padang, together with local
politicians, had long demanded that the central government
separate it from Semen Gresik as they were opposed to a plan to
sell further shares in Semen Gresik to Cemex, which already owns
a 25-percent stake in the company.

The demand, however, will cost the government dearly as it
would have to compensate Cemex and other minority shareholders of
Semen Gresik. Semen Padang's rebellion has thwarted, for the time
being, the government's key privatization program, planned since
2001.

The old Semen Padang management allegedly held up Semen
Gresik's 2002 accounts, forcing it to miss a March 31 deadline to
submit its financial report, which prompted auditors to qualify
its accounts.

As a result, the Jakarta Stock Exchange suspended trading in
the Semen Gresik shares on Monday morning.

Meanwhile, Semen Gresik president Satriyo said in the
extraordinary meeting that he hoped the new management would take
over with a commitment to resolve and fix the current problems.

Satriyo was confident that the employees of Semen Padang would
support the new management team, some of whom were promoted from
within the company.

Dwi Sucipto, a former director at Semen Padang, has been
appointed the new president, while Ismet Yuzairi, a former North
Sumatra army commander, has been named president commissioner.